Frequently Asked Questions
General FAQs
- What exactly is prison privatization?
- Why can't the public sector adopt private sector methods and save even more since the public sector doesn't need to make a profit?
- Won't a private company's focus on the 'bottom line' result in a lower quality of safety, security and service to
the staff, prisoners and government?
- How do we know that a company will do all that it promised to do when it signed a contract?
- Isn't it wrong for the government to contract out a core governmental responsibility?
- Won't a company 'lowball' its bid for the first couple of years in order to raise its fees later when the government
is dependent upon the service?
- Since a company gets paid a fee for each offender it keeps, won't it try to increase the amount of time offenders stay in prison?
- How can an out-of-state company possibly understand the cultural and community needs of this state's offenders?
- How do we know a company won't buy all of its daily operational supplies from central wholesalers located outside of the state?
- Isn't it wrong for a company to make a profit from the suffering of others?
What exactly is prison
privatization?
The term "privatization" is a misnomer since it correctly and narrowly applies to private sector financing and ownership of infrastructure traditionally financed and owned by the public sector. In common usage, however, prison privatization has come to include not only the transfer of infrastructure from the public to private sector, but the fast-track design and construction and the contracted operation of a facility by the private sector.
Why can't the public sector adopt private sector methods and save even more since the public sector doesn't need to make a profit?
Many public sector agencies operate efficiently. But public sector efficiencies are generally "spent" in growth - growth in staff, growth in procurements, and growth in bureaucracy. Despite the best efforts of governments around the world to emulate private sector methods through hiring of former business executives, agency corporatization, etc., more than marginal savings frequently seem unobtainable or unsustainable. This is, in our opinion, due to the lack of a profit-based structure.
Won't a private company's focus on the 'bottom line' result in a lower quality of safety, security and service to the staff, prisoners and government?
Within this question are a host of closely associated suspicions, such as:
The term "privatization" is a misnomer since it correctly and narrowly applies to private sector financing and ownership of infrastructure traditionally financed and owned by the public sector. In common usage, however, prison privatization has come to include not only the transfer of infrastructure from the public to private sector, but the fast-track design and construction and the contracted operation of a facility by the private sector.
Why can't the public sector adopt private sector methods and save even more since the public sector doesn't need to make a profit?
Many public sector agencies operate efficiently. But public sector efficiencies are generally "spent" in growth - growth in staff, growth in procurements, and growth in bureaucracy. Despite the best efforts of governments around the world to emulate private sector methods through hiring of former business executives, agency corporatization, etc., more than marginal savings frequently seem unobtainable or unsustainable. This is, in our opinion, due to the lack of a profit-based structure.
Won't a private company's focus on the 'bottom line' result in a lower quality of safety, security and service to the staff, prisoners and government?
Within this question are a host of closely associated suspicions, such as:
"Won't a company cut costs by:
These questions and others like them
betray a misunderstanding of the nature of a service company
and its relationship to its customers, as well as a flawed
concept of how a service company makes money.
Paying employees in a labor-intensive service industry such as corrections less than competitive wages and benefits inevitably results in a dissatisfied workforce and a high rate of attrition.
Each correctional officer represents a significant investment of time and money by a private operator; a high rate of staff turnover means substantial operating losses, as well as operational inefficiency associated with lack of employee continuity and loss of experience-linked productivity.
Similarly, the delivery of low-quality food would prove disastrous in a prison, where the maintenance of order is often dependent upon the quality and portions of daily meals. No prison operator, public or private, ever saved money two days in a row by cutting down on the quality or portion size of prison meals.
The quality of offender rehabilitation programs is frequently the means by which the private operator distinguishes its service from that of the public sector. Professional and effective offender programs result in a safe, secure and ordered routine, the foundation of cost-effectiveness in any prison.
So where are the savings?
Quite significant savings of approximately 20 - 30 percent are achieved by the private sector in the design and construction of a prison. The traditional governmental method of linear and time-consuming contracts for the design and then the construction of a facility is thrown out in favor of a fast-track, design-build approach backed by a fully guaranteed, firm, fixed-fee contract.
By designing out staffing redundancies, a private company is able to save significant costs over the long term. We estimate that the operating costs of a prison over its lifecycle are at least 80 percent of its total costs and that labor costs represent approximately 70 percent of that total; any reduction of redundant staffing costs will obviously generate huge efficiencies and savings over time. A single post can cost an operator between $150,000 and $250,000 a year in wages and benefits.
A prison designed by its private sector operator is the best guarantee of a prison designed to maximize safety, security and cost-efficiency. The GEO Group, Inc. (GEO) employs five in-house architects to guarantee the safety, security and cost-efficiency of all of its facility conceptual designs.
In operations, the private sector is able to save money, generally estimated as equal to at least 10 -20 percent of the public sector's cost for operating a similar facility, by the development of an efficient, operator-driven design, and through the application of private sector management methods primarily focused on employee productivity and performance, and efficient procurement of supplies.
Examples of such effective management methods include the daily management and elimination of employee sick time and overtime abuses, as well as the introduction of private sector procurement methods that reduce 'red tape' and bureaucratic inefficiencies. GEO employs the latest human resource and procurement management tools to track its bottom line daily, and to ensure the quality of its service.
How do we know that a company will do all that it promised to do when it signed a contract?
This is really a question directed to the critical issue of accountability. In a very real sense, private operators are more accountable to the government than their public sector counterparts. At least seven factors contribute to this enhanced level of accountability:
(1) Contract Terms
The terms of every private operational contract require the operator to meet, and in some cases exceed, all performance standards, laws, regulations and rules applicable to the public sector. Breach of these standards can result in contractual sanctions, including termination.
(2) Government Monitor
Most contracts call for the provision of space to accommodate an on-site public sector monitor who has complete and unrestricted access, at all times, to all facility employees, offenders, records and information. This is almost never true of a public facility.
(3) Annual Government Audits
It is common for the government to perform an annual audit of contract performance. Some contracts today tie performance to remuneration through a system of performance-linked bonuses.
(4) In-House Audits
Private companies employ in-house corporate personnel to monitor and audit all aspects of operational performance. GEO's corporate and regional personnel monitor such matters as security incident reports, health services, overtime and sick time, and facility purchases on a daily, weekly and monthly basis.
(5) Accreditation
In addition to government and in-house monitors and auditors, most contracts call for accreditation of operations within one or two years of opening by such third-party accreditation agencies as the American Correctional Association (ACA), the National Commission of Correctional Health Care (NCCHC), and the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). These accreditation systems serve as an outside and objective Quality Assurance program. GEO has achieved or is in the process of obtaining ACA, NCCHC and/or JCAHO accreditation for its facilities where such accreditations are required by the client.
(6) Competition
There is a healthy competition among the handful of serious private correctional service providers that results in the need for each to maintain a standard of performance consistent with a marketable reputation and something as fundamental and perhaps quaint as the notion of "pride." At GEO we consider our reputation to be our single most important marketing asset; the word "adequate" is never used in-house as a synonym for "satisfactory."
(7) Media Scrutiny
We are all familiar with most of our public institutions - we have all spent time in schools, libraries, and hospitals. But for most of us, our prisons remain hidden behind a shroud of movie images and sensational news stories, and we are naturally curious about an institution that is financed by all but seen by few. Add to this natural curiosity the fact that the operation of a prison by a private company is still a relatively novel idea and you readily appreciate the media's heightened focus on privately operated prisons.
Private operators have come to understand and to expect that an otherwise uneventful incident in a publicly operated prison will generate significant media interest and coverage when occurring in a privately operated facility. A healthy respect for a vigilant media is a powerful guarantee of private operator accountability.
Isn't it wrong for the government to contract out a core governmental responsibility?
It is important to remember that the government is not contracting away its responsibility for the safe, secure and humane incarceration of offenders; that responsibility always remains with the government. Rather, it is contracting out to a private company the performance of those tasks that comprise that responsibility.
Many of the individual tasks within a prison have long been contracted out to the private sector - health services, food services, maintenance, to name a few. Contracting out the 'complete package' is a difference of degree, not of kind.
For many years, the United States contracted out the operation of its incoming missile defense system, NORAD, to the private sector. It is hard to conceive of a more 'core governmental responsibility' than the alerting of one's citizens to the imminent and calamitous attack of a hostile foreign government.
Won't a company 'lowball' its bid for the first couple of years in order to raise its fees later when the government is dependent upon the service?
Prison operating contracts are generally for an initial term of not more than three to five years. Few company executives can offer their shareholders 'loss leaders' for very long without reaching in the old back drawer and dusting off their resumes.
As already discussed, competition among private operators remains keen. Any operator who believes that today's losses can be made up at tomorrow's negotiating table forgets that the competition is eager to take a seat at that table.
Since a company gets paid a fee for each offender it keeps, won't it try to increase the amount of time offenders stay in prison?
It is inconceivable that anyone could pick up a newspaper or watch a television today and believe that private prison operators need to work at increasing demand for their services. It is an unfortunate fact that the "market" continues to develop and grow despite all best efforts to address the causes and symptoms of crime.
Private prison operators do not legislate, consider, nor impose the sentences served by offenders. We are contractually prohibited from adding or subtracting one day to an offenders's sentence.
How can an out-of-state company possibly understand the cultural and community needs of this state's offenders?
This is an important question for anyone considering the private operation of a correctional facility. Cultural and community ties are often one of the most critical factors in the success of any rehabilitation program, and it is vital that offender programs are tailored to meet the peculiar needs of the offenders they are designed to assist.
One must remember that a private company is not going to import either its programs or its employees from some other state or jurisdiction.
GEO employs nearly every facility employee from the immediate local region. We hold a "job fair" several months prior to the opening of a facility to allow local residents the opportunity to learn about the qualifications, pay and benefits associated with each employment position in the facility. A "first right of refusal" will be given to local residents who are qualified for the jobs.
Similarly, offender programs are carefully designed to reflect not only local cultural characteristics, but also to "track" with the established program objectives of the host correctional system.
GEO is primarily a service company with acquired expertise and experience in the design, financing, construction and operation of prisons.
There is no single GEO prison design, no fixed method of financing, no one system of construction, no single set of operating rules. We are not a franchise company. Each of our prisons represents a comprehensive and creative response to the unique requirements of each client.
What GEO offers to our clients is knowledge - proprietary information - in the form of a transfer of technology. We bring our insights and experience gained from around the world to a collective, local effort, and we adopt and adapt until we have achieved a local solution that represents world-best standards.
In short, our Texas and our Australian prisons have far more in common with their local public sector facilities than they do with each other - except insofar as each, and all, represent our commitment to professionalism, integrity, and quality, client-based service.
How do we know a company won't buy all of its daily operational supplies from central wholesalers located outside of the state?
It is a top priority of our Company to demonstrate our commitment to a long-term relationship with our public sector client. One of the primary ways this is achieved is by being a good corporate citizen.
In addition to our "job fair," GEO holds a "vendor fair" prior to the opening of the facility where we provide local vendors with comprehensive lists of the goods and services we require on a regular basis for the operation of the facility. Local vendors are given every opportunity to meet our needs with a strong bias in favor of local purchases.
In addition, GEO forms a community liaison committee in the host community comprised of community leaders, both elected and non-elected. This committee begins to meet regularly prior to and during the construction of the facility in order to fully involve the community in the "life" of the prison and to address any questions or concerns community groups or citizens may have regarding the facility's mission or operation.
Isn't it wrong for a company to make a profit from the suffering of others?
First, it must be said that "the suffering of others" is hardly how corrections professionals, including GEO, would characterize the conditions under which our offenders are held.
GEO knows that the loss of freedom, and not the conditions of confinement, is the only punishment that an offender should face. Our offender regimes are strict and well organized, but they are not punitive or demeaning. Offenders are addressed by their last name. They are shown, and they are expected to return, simple courtesies and respect.
If some persist in seeing imprisonment for the commission of crime as "suffering," it is hard to appreciate how the simple lack of profit by the public sector somehow ennobles the enterprise.
One final word about the "profit" issue. As noted above, the public sector does indeed profit through its efforts. The expenditure of those profits upon increased bureaucracies, line staff and supplies, while less visible than shareholder dividends, is nevertheless real, capable of measure, and worthy of note.
The privatization of prisons is a public-private partnership, and this relationship is no less true in the area of profit sharing. Public officials who promote privatization may take justifiable pride that every dollar of taxpayer funds saved can be spent on otherwise neglected competing public services such as schools, hospitals, roads, airports and waste management facilities.
Paying employees in a labor-intensive service industry such as corrections less than competitive wages and benefits inevitably results in a dissatisfied workforce and a high rate of attrition.
Each correctional officer represents a significant investment of time and money by a private operator; a high rate of staff turnover means substantial operating losses, as well as operational inefficiency associated with lack of employee continuity and loss of experience-linked productivity.
Similarly, the delivery of low-quality food would prove disastrous in a prison, where the maintenance of order is often dependent upon the quality and portions of daily meals. No prison operator, public or private, ever saved money two days in a row by cutting down on the quality or portion size of prison meals.
The quality of offender rehabilitation programs is frequently the means by which the private operator distinguishes its service from that of the public sector. Professional and effective offender programs result in a safe, secure and ordered routine, the foundation of cost-effectiveness in any prison.
So where are the savings?
Quite significant savings of approximately 20 - 30 percent are achieved by the private sector in the design and construction of a prison. The traditional governmental method of linear and time-consuming contracts for the design and then the construction of a facility is thrown out in favor of a fast-track, design-build approach backed by a fully guaranteed, firm, fixed-fee contract.
By designing out staffing redundancies, a private company is able to save significant costs over the long term. We estimate that the operating costs of a prison over its lifecycle are at least 80 percent of its total costs and that labor costs represent approximately 70 percent of that total; any reduction of redundant staffing costs will obviously generate huge efficiencies and savings over time. A single post can cost an operator between $150,000 and $250,000 a year in wages and benefits.
A prison designed by its private sector operator is the best guarantee of a prison designed to maximize safety, security and cost-efficiency. The GEO Group, Inc. (GEO) employs five in-house architects to guarantee the safety, security and cost-efficiency of all of its facility conceptual designs.
In operations, the private sector is able to save money, generally estimated as equal to at least 10 -20 percent of the public sector's cost for operating a similar facility, by the development of an efficient, operator-driven design, and through the application of private sector management methods primarily focused on employee productivity and performance, and efficient procurement of supplies.
Examples of such effective management methods include the daily management and elimination of employee sick time and overtime abuses, as well as the introduction of private sector procurement methods that reduce 'red tape' and bureaucratic inefficiencies. GEO employs the latest human resource and procurement management tools to track its bottom line daily, and to ensure the quality of its service.
How do we know that a company will do all that it promised to do when it signed a contract?
This is really a question directed to the critical issue of accountability. In a very real sense, private operators are more accountable to the government than their public sector counterparts. At least seven factors contribute to this enhanced level of accountability:
(1) Contract Terms
The terms of every private operational contract require the operator to meet, and in some cases exceed, all performance standards, laws, regulations and rules applicable to the public sector. Breach of these standards can result in contractual sanctions, including termination.
(2) Government Monitor
Most contracts call for the provision of space to accommodate an on-site public sector monitor who has complete and unrestricted access, at all times, to all facility employees, offenders, records and information. This is almost never true of a public facility.
(3) Annual Government Audits
It is common for the government to perform an annual audit of contract performance. Some contracts today tie performance to remuneration through a system of performance-linked bonuses.
(4) In-House Audits
Private companies employ in-house corporate personnel to monitor and audit all aspects of operational performance. GEO's corporate and regional personnel monitor such matters as security incident reports, health services, overtime and sick time, and facility purchases on a daily, weekly and monthly basis.
(5) Accreditation
In addition to government and in-house monitors and auditors, most contracts call for accreditation of operations within one or two years of opening by such third-party accreditation agencies as the American Correctional Association (ACA), the National Commission of Correctional Health Care (NCCHC), and the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). These accreditation systems serve as an outside and objective Quality Assurance program. GEO has achieved or is in the process of obtaining ACA, NCCHC and/or JCAHO accreditation for its facilities where such accreditations are required by the client.
(6) Competition
There is a healthy competition among the handful of serious private correctional service providers that results in the need for each to maintain a standard of performance consistent with a marketable reputation and something as fundamental and perhaps quaint as the notion of "pride." At GEO we consider our reputation to be our single most important marketing asset; the word "adequate" is never used in-house as a synonym for "satisfactory."
(7) Media Scrutiny
We are all familiar with most of our public institutions - we have all spent time in schools, libraries, and hospitals. But for most of us, our prisons remain hidden behind a shroud of movie images and sensational news stories, and we are naturally curious about an institution that is financed by all but seen by few. Add to this natural curiosity the fact that the operation of a prison by a private company is still a relatively novel idea and you readily appreciate the media's heightened focus on privately operated prisons.
Private operators have come to understand and to expect that an otherwise uneventful incident in a publicly operated prison will generate significant media interest and coverage when occurring in a privately operated facility. A healthy respect for a vigilant media is a powerful guarantee of private operator accountability.
Isn't it wrong for the government to contract out a core governmental responsibility?
It is important to remember that the government is not contracting away its responsibility for the safe, secure and humane incarceration of offenders; that responsibility always remains with the government. Rather, it is contracting out to a private company the performance of those tasks that comprise that responsibility.
Many of the individual tasks within a prison have long been contracted out to the private sector - health services, food services, maintenance, to name a few. Contracting out the 'complete package' is a difference of degree, not of kind.
For many years, the United States contracted out the operation of its incoming missile defense system, NORAD, to the private sector. It is hard to conceive of a more 'core governmental responsibility' than the alerting of one's citizens to the imminent and calamitous attack of a hostile foreign government.
Won't a company 'lowball' its bid for the first couple of years in order to raise its fees later when the government is dependent upon the service?
Prison operating contracts are generally for an initial term of not more than three to five years. Few company executives can offer their shareholders 'loss leaders' for very long without reaching in the old back drawer and dusting off their resumes.
As already discussed, competition among private operators remains keen. Any operator who believes that today's losses can be made up at tomorrow's negotiating table forgets that the competition is eager to take a seat at that table.
Since a company gets paid a fee for each offender it keeps, won't it try to increase the amount of time offenders stay in prison?
It is inconceivable that anyone could pick up a newspaper or watch a television today and believe that private prison operators need to work at increasing demand for their services. It is an unfortunate fact that the "market" continues to develop and grow despite all best efforts to address the causes and symptoms of crime.
Private prison operators do not legislate, consider, nor impose the sentences served by offenders. We are contractually prohibited from adding or subtracting one day to an offenders's sentence.
How can an out-of-state company possibly understand the cultural and community needs of this state's offenders?
This is an important question for anyone considering the private operation of a correctional facility. Cultural and community ties are often one of the most critical factors in the success of any rehabilitation program, and it is vital that offender programs are tailored to meet the peculiar needs of the offenders they are designed to assist.
One must remember that a private company is not going to import either its programs or its employees from some other state or jurisdiction.
GEO employs nearly every facility employee from the immediate local region. We hold a "job fair" several months prior to the opening of a facility to allow local residents the opportunity to learn about the qualifications, pay and benefits associated with each employment position in the facility. A "first right of refusal" will be given to local residents who are qualified for the jobs.
Similarly, offender programs are carefully designed to reflect not only local cultural characteristics, but also to "track" with the established program objectives of the host correctional system.
GEO is primarily a service company with acquired expertise and experience in the design, financing, construction and operation of prisons.
There is no single GEO prison design, no fixed method of financing, no one system of construction, no single set of operating rules. We are not a franchise company. Each of our prisons represents a comprehensive and creative response to the unique requirements of each client.
What GEO offers to our clients is knowledge - proprietary information - in the form of a transfer of technology. We bring our insights and experience gained from around the world to a collective, local effort, and we adopt and adapt until we have achieved a local solution that represents world-best standards.
In short, our Texas and our Australian prisons have far more in common with their local public sector facilities than they do with each other - except insofar as each, and all, represent our commitment to professionalism, integrity, and quality, client-based service.
How do we know a company won't buy all of its daily operational supplies from central wholesalers located outside of the state?
It is a top priority of our Company to demonstrate our commitment to a long-term relationship with our public sector client. One of the primary ways this is achieved is by being a good corporate citizen.
In addition to our "job fair," GEO holds a "vendor fair" prior to the opening of the facility where we provide local vendors with comprehensive lists of the goods and services we require on a regular basis for the operation of the facility. Local vendors are given every opportunity to meet our needs with a strong bias in favor of local purchases.
In addition, GEO forms a community liaison committee in the host community comprised of community leaders, both elected and non-elected. This committee begins to meet regularly prior to and during the construction of the facility in order to fully involve the community in the "life" of the prison and to address any questions or concerns community groups or citizens may have regarding the facility's mission or operation.
Isn't it wrong for a company to make a profit from the suffering of others?
First, it must be said that "the suffering of others" is hardly how corrections professionals, including GEO, would characterize the conditions under which our offenders are held.
GEO knows that the loss of freedom, and not the conditions of confinement, is the only punishment that an offender should face. Our offender regimes are strict and well organized, but they are not punitive or demeaning. Offenders are addressed by their last name. They are shown, and they are expected to return, simple courtesies and respect.
If some persist in seeing imprisonment for the commission of crime as "suffering," it is hard to appreciate how the simple lack of profit by the public sector somehow ennobles the enterprise.
One final word about the "profit" issue. As noted above, the public sector does indeed profit through its efforts. The expenditure of those profits upon increased bureaucracies, line staff and supplies, while less visible than shareholder dividends, is nevertheless real, capable of measure, and worthy of note.
The privatization of prisons is a public-private partnership, and this relationship is no less true in the area of profit sharing. Public officials who promote privatization may take justifiable pride that every dollar of taxpayer funds saved can be spent on otherwise neglected competing public services such as schools, hospitals, roads, airports and waste management facilities.